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The determination of fair market value is a question
of fact to be resolved from a consideration of all rele-
vant evidence in the record and appropriate inferences
therefrom. See Estate of Jung v. Commissioner, 101 T.C.
412, 423-424 (1993); Estate of Andrews v. Commissioner,
79 T.C. 938, 940 (1982); Duncan Indus. v. Commissioner,
73 T.C. 266, 276 (1979); Kaplan v. Commissioner, 43 T.C.
663, 665 (1965); Mandelbaum v. Commissioner, T.C. Memo.
1995-255, affd. without published opinion 91 F.3d 124
(3d Cir. 1996). Petitioners bear the burden of proving
that the fair market value determined by respondent is
incorrect. See Rule 142(a), Tax Court Rules of Practice
and Procedure; Estate of Jung v. Commissioner, supra at
424; Estate of Winkler v. Commissioner, T.C. Memo. 1989-
231. All Rule references hereinafter are to the Tax
Court Rules of Practice and Procedure.
Determining fair market value is often difficult
where, as here, the subject property is the capital stock
of a closely held corporation for which no public market
exists. In these circumstances, an actual arm's-length
sale of the stock in the normal course of business within
a reasonable time before or after the valuation date is
the best evidence of fair market value. See Estate of
Andrews v. Commissioner, supra at 940; Estate of Campbell
v. Commissioner, T.C. Memo. 1991-615, sec. 20.2031-2(b),
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